WESTFIELD — On Tuesday, the Westfield Town Council passed an amended redevelopment agreement in connection with One Westfield Place (OWP) that would reduce the town’s bond obligation by about $12 million and codify other changes to the project’s financials.
“This is not a re-litigation of the entire project,” Mayor Shelley Brindle said Tuesday, adding that OWP is still facing legal challenges from Westfield Advocates for Responsible Development, an ad-hoc citizens group that has filed multiple development-related lawsuits against the town in recent years.
The amended agreement, the town’s redevelopment counsel Steve Mlenak said, will re-order the sequencing of public improvements to prioritize projects on the south side of town, reduce the number of requisite bond issuances from three to two, and require the project’s redeveloper to deliver a $4.7-million, non-refundable deposit to the town as soon as construction work begins at the Lord & Taylor site on North Avenue West.
“The PILOT (Payment In Lieu of Taxes) schedule for the project remains consistent…as it was when the financial agreements were approved in 2023,” said Matt Jessup, the town’s redevelopment bond counsel. Mr. Jessup explained that, in addition to traditional land taxes, the redeveloper will still be required to pay an incrementally-increased percentage of its Annual Gross Revenue to the town over the course of 30 years under the terms of the new agreement.
The amended agreement, Mr. Jessup continued, also includes a series of “built-in protections” for the town and he highlighted the fact that the redeveloper, Saks Global (formerly HBC|Streetworks), would be required to ensure that its annual PILOT payments equal 100 percent of the debt service on the town’s bonds.
Saks would also be required to sign lease agreements for at least 75 percent of its proposed south-side office space before the issuance of the second bond ordinance.
“We want to do everything that we can to protect [the town’s] AAA bond rating,” Mr. Jessup said. “We will be able to tell the rating agency that we are keeping our debt-to-project revenue- ratio the same.”
The council voted by a narrow margin and along party lines to adopt an amended redevelopment plan for the site last November after HBC|Streetworks requested modifications to the original agreement on behalf of one of its potential commercial tenants.
Last year all of HBC’s domestic assets, including Streetworks (HBC’s development arm and its primary point of contact for the OWP project) and the Lord & Taylor property in Westfield, were placed under the control of a U.S. based parent company known as Saks Global. Then, in March, HBC filed for bankruptcy and announced plans to liquidate most of its Canadian retail holdings to offset growing financial challenges.
The amended plan, Mayor Brindle said Tuesday, “still delivers substantial revenue and public benefits.”
The new plan calls for the removal of 200,000 square feet of office space initially slated for construction at the South Avenue train station parking lot, converts two underground parking garages (one at the Lord & Taylor site and one on South Avenue) into above-ground parking decks, allows Saks Global to host an urgent-care facility as one of its potential tenants and lifts a previous 55-plus age restriction on 16 West Zone town homes to expand market-rate offerings. The amendments also include provisions to decrease building heights across the scope of the project and, according to town officials, reduce its overall residential and commercial footprints by about 25 percent.
Mayor Brindle said earlier this year that she had no intention of breaking ties with the company and, along with several of her Democratic colleagues, publicly showed her support for HBC’s decision to “protect good assets from non-performing [ones].”
Moving forward with OWP, the mayor said Tuesday, will allow the town to “implement a smart-growth strategy in existing commercial zones” and “ensure control over development.”
“The [new] redevelopment agreement…allows us to preempt any less-than-desirable outcomes and to control what is built, what the details look like, and what improvements are required on this key and strategically important piece of private property,” she said.
The council’s Republican representatives, all of whom voted against the new redevelopment plan last year, raised several questions about the project’s continued viability and expressed concerns that the new agreement could still pose challenges for the town down the line.
“It’s not misinformation to say that Saks Global is having issues. When their executives met with the [town’s] Finance Committee, I asked them if they were having trouble paying vendors as reported, and they said ‘yes.’ I don’t know if this matters or not, but it’s a fact,” Ward 4 representative David Kiefer said. “And to be honest, I’m not too excited about the way the amended project looks. It’s a good thing that they’ve reduced the office space…but they’re bringing the parking spaces aboveground. Parking is necessary, but it’s not attractive.”
Councilwoman Linda Habgood, meanwhile, argued that the project will give the town access to a unique revenue stream that will allow future administrations to tackle large-scale improvement projects throughout the community.
“The best way for our town to be able to take on big things is to engage with the redevelopment laws that exist here in New Jersey,” she said. “Despite the fact that Saks Global may not have the best credit from a balance-sheet perspective, they’ve developed a very laudable project that is attractive to a lot of people.”
The council ultimately voted to approve the resolution by a narrow margin of 5 to 4. Once again, Mayor Brindle and the other Democratic council members (David Contract, Michael Dardia, Jim Hely and Ms. Habgood) voted in favor of the project, while the GOP representatives (Michal Domogala, Todd Saunders, Michael Armento and Mr. Kiefer) voted against it.
*Editor’s Note: This story was corrected to reflect that the agreement was passed by resolution, not by ordinance. It was also updated to reflect the correct timeline of Saks Global’s spin-off from HBC prior to the bankruptcy filing.
